President Obama does not need to be polling at 50% to be favourite to win in November. Photograph: Chris Kleponis/AFP

Sometimes, there is a myth that simply won't die. It just gets repeated over and over, without much reason. Meet the 50% rule: this is the idea that if an incumbent is under 50%, then he could lose because undecideds break towards the challenger.

Barack Obama is polling at about 48% and up by about 3 percentage points right now. The 50% rule says Obama may be leading, but may not win if the election were today. The truth of the matter is that an Obama lead of 3 percentage points, and being at 48%, is a fine position for an incumbent. Here's why:

1). The winner of this election is likely only going to need 49% of the vote

It may get lost in the daily back and forth of the campaign, but there are other candidates besides Obama and Mitt Romney running.

Former New Mexico Governor Gary Johnson is running on the Libertarian ticket, and is arguably the most respectable third party campaign since Ralph Nader in 2000. He is already on the ballot in 48 of the 50 states and is in position to be on the ballot in all 50. Considering that the ideologically similar Ron Paul doubled his primary vote from 2008, don't be surprised if Johnson doubles the 2008 Libertarian party performance. That puts him on track for about 0.8% of the national vote.

The Constitution party's Virgil Goode has less ballot access, but is certainly more impressive than his party 2008 candidate, Charles Baldwin. Goode is a former congressman who may play a spoiler role in Virginia. He could pick up 0.2-0.3% of the national vote.

Don't forget the liberal third party candidates. You can probably add in another 0.2-0.3% for the Green party's nominee, Jill Stein. And who really knows what percentage of the vote comedian and Peace and Freedom party candidate Roseanne Barr will get? Plus, there are many other minor parties and write-ins.

The bottom line is that it's quite possible that the third party vote may add up to 2%.

Obama's certainly at 48%, and a number of polls have him at 49% or higher. Even if you believe that 80% of undecideds go for the challenger, Obama would still collect more than 1 percentage point overall from undecideds to put him over the 49% threshold.

2). Historically, undecideds don't break towards the challenger

Back in 2004, I remember confidently strutting around thinking that John Kerry would do better than polls had him – because of this notion that undecideds break towards the challenger. I got a good smack of reality when the results came in. Kerry did not do substantially better than his percentage in the pre-election polls. In fact, it was George W Bush who slightly over-performed.

Studies have found that 2004 was no aberration. Nate Silver examined September polls and compared them to the November results. He found that while challengers generally do better, it's not by as much as you might think – nor why you would think.

It turns out that whichever candidate is trailing (challenger or incumbent) cuts the leading candidate's edge by about 30% from September polls. That means if an incumbent is leading by 2.5 points, you'd expect him to win by about 1.8 percentage points in November. Because the number of points gained by the challenger is proportional to the incumbent's lead, we often see gains greater than 1 point as challengers are often behind by more than Romney is right now.

Once we get to the final polls, both candidates should, on average, do about as well as the polls have them placing.

The pool of undecided voters is likely less than 10% of the electorate at this point. Indeed, with a fairly stark choice between the candidates, it's a wonder how the percentage is that high.

The profile of the undecideds turns out to match reasonable assumptions. Undecideds don't approve of Obama's job performance, but they hate Romney. They don't watch the news and tend to be independents. Undecideds don't sit around forming partisan opinions all day, because they tend to have better things to do.

They are the type of voters who could be persuaded by a television ad. Obama has more ads airing in the swing states than Romney does. While Romney and his fellow Republicans may have more ads in the final months than Obama and his allies will, that advantage won't be overwhelming. There is also likely to be a point of saturation, with diminishing returns for the extra airplay.

Moreover, ask yourself this question: do you choose the product you don't like but know, or the product you like even less and don't know? We saw this formula play out in many state-wide races in 2010. In at least three elections, the incumbent had negative net approval ratings and the challenger had negative net favorable ratings. In all these races, the incumbent managed to survive.

Conclusion

President Obama is in fine shape given the current polling data, even though he isn't at 50% support. If the polling aggregates continue to show him leading by a 2 percentage-point or greater margin at the end of the week (that is, after the fading of the convention bounces), then he's going to be a clear favorite to win in November.

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